What is the best and least risky: bridging loan or a conventional mortgage?

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My current house is not sold yet and I do not want on my new dream home, losing the payment due by September. Should I go for a bridge loan or simply a new mortgage for my new home? Which is less risky? If I get a new mortgage and I sold my current house, I can pay money to get some? Can I refinance mortgages and pay less to repay part?
It was announced recently, HUD FHA allows lenders approved short-term loans in the amount of credit to be used in the purchase of the house to issue advance. Does anyone know if most mortgages has such a program? I checked with my department of Housing and they have not yet established a blocking program. This is an FHA loan.

  1. Reply
    Mama Pastafarian
    February 2, 2011 at 7:56 am

    A regular loan would be less risky IF you have the income to support two mortgages, the one on the new house and the one on the new house.

    A bridge loan might run out before your old house sells.

    Once you sell your old house, you can put the cash from the equity into the new house, and have a shorter time left to pay on your mortgage, or you could put the cash into the new house and then refinance to have a smaller payment.

  2. Reply
    Giggity Giggity
    February 2, 2011 at 8:44 am

    bridge loan will secure the house you want but will be pricey after awhile. if you get a new loan/mortgage you’ll get the house and will be able to use the money from the sale to help pay some of it off. make sure you get little or no prepayment penalties. your refinance will only be advantageous if your credit score is good. you will need some seasoning in order to get a refinance as most lenders will not loan you money right after you move in. some will but for a very high rate. either way, you’re taking out more money than you need to secure what you want. my advice, get a new mortgage, I assume you’ve paid or are close to paying off your old one?, and secure your new house since it is very important to you. once you sell the house, retain a good majority of the money, pay off the old mortgage is you haven’t already. if you rate and terms are good, then keep them for your new mortgage. if they’re bad, wait at least 6-8 months before refinancing.

  3. Reply
    February 2, 2011 at 9:01 am

    Your best bet is to get a new loan for your new place and if your house doesn’t sell, either rent it out or put it under a lease purchase option. I would also refinance the old house (if it doesn’t sell) to pay as little as possible, such as a negative ARM loan.

    If you’re in Southern California, contact me and we can go over your situation and see what is your best option.

    Good Luck and don’t worry about your old house, it makes money regardless what you do.

  4. Reply
    February 2, 2011 at 9:54 am

    Our friend Saternag hit it right on the nose. Great answer. He mentioned a Negative Amortization mortgage. Now, don’t get too worried about the name of the product. You could even call it deferred interest.

    This would be the best type of loan for you at this point. Plus, even if your home did not end up selling, you could still rent it out and make a profit off the home.

    The advantage to these types of loans is the fact that you pay a very low interest rate on them. Try…1.25%. There are options that stay fixed for 5 years, although the company that I work for is the only company that I know of that has these particular types of fixed payment option ARMS.

    If you would like to know more about option ARMS/deferred interest mortgages, please feel free to contact me at timothy.kazee@americanhm .com and I would be more than happy to offer some help and advice on these. Good luck!

  5. Reply
    February 2, 2011 at 9:57 am

    I am not sure but I think it was passed on Friday (at least in Florida). I am waiting to find out myself. What state are you in? I would suggest you find a mortgage professional in your area or a trusted real estate agent and ask. I don’t know how Lender Specific it will be, if they told you they are the only ones able to do it, they are misleading you. They have to be qualified to originate FHA to do a FHA loan but the 8000.00 credit is going to be across the board. The borrower has to qualify for it.

    You can call email me on Monday and I will have the resourses to find out for you. 🙂

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